They were accompanied by funding agreements

In a decision that could ultimately change the rules of the stock market game for the Centre of Paris, the commission of the authority of des marchés financiers (AMF) sanctions sentenced investment company Wendel and its former Chairman of the Executive Board, Jean-Bernard Lafonta, to 1.5 million euros to fine one and the other for not having informed in time the market on a financial operation on Saint-Gobain. This sanction creates the surprise, since it runs counter to the recommendations of the rapporteur of the commission, Guillaume Jalenques de Labeau, who Jean-Bernard Lafonta and Wendel had to be removed from the case.

The essence of the thinking of the members of the commission focused on the interpretation of a section of the AMF General regulations which indicates that "any person who prepares for his account, a financial transaction may have a significant impact on the course of a financial instrument or on the status and rights of the holders of this financial instrument should, as soon as possible"", bring to the attention of the public characteristics of this operation."

Saint-Gobain shares

In the case of Wendel and his ex-patron, the financial transaction dates back to December 2006 and extends until June 2007. It required the use of four banks (Deutsche Bank, Natixis, HSBC, Société Générale), with which Wendel has concluded a "total return swaps" (TRS), derivatives of actions that allow to expose economically to the capital of a company without own securities. The TRS signed with Wendel at the instigation of Jean-Bernard Lafonta were all underlying Saint-Gobain. They were accompanied by funding agreements.

In early September, the notional amount of these financial instruments reached EUR 6.3 billion and accounted for 22.5 of the capital of the manufacturer of construction materials. It is from this date, in a devalued stock market context, Wendel decided to buy Saint-Gobain shares directly in the market. It is this set of elements - signature of the TRS, funding agreements, unwinding of the TRS and almost simultaneous purchases of Saint-Gobain shares - which was a financial operation in the eyes of the commission of the penalties of the MFA. "Sales of the shares which previously provided coverage of banks promote purchases the dual extent where they create the liquidity on the title, and by offering a matching purchases, limit the risks of rising price that would result from a rapid rise in the capital." Today, Wendel is the first shareholder of Saint-Gobain, with approximately 17.5 of its capital.

Legal woes

The investment company quickly indicated yesterday that it would form an action before the Court of appeal of Paris, regretting that "uninterrupted polemics about of the Wendel group, on the one hand, and the role of AMF, on the other hand, have altered the climate of serenity needed for the analysis of the case". A reference to the legal woes of Ernest-Antoine Seilliere tandem - Jean-Bernard Lafonta in relation to established incentive plan in place when the two men were together at the head of Wendel. For its part, Jean-Bernard Lafonta indicated that it would also form a remedy, denouncing a decision which "lightly the serious procedural problems which have dotted the investigation". Still, is it that the decision of the regulator would set a precedent if it was confirmed on appeal.